The deal would settle two civil lawsuits seeking more than $20 billion in damages, although a criminal case involving Chevron and others will continue, the prosecutor's office said. The deal can be approved if regulators confirm that the spill did not cause any environmental damage.

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By JEFF FICK

RIO DE JANEIRO -- US oil major Chevron Corp. has offered to pay
$149 million to settle two civil lawsuits in Brazil related to
an oil spill in late 2011, with final approval of the deal
likely in January, Brazil's federal prosecutor's office said
Monday.

A settlement would close an important part of a
controversial chapter in the history of Brazil's burgeoning oil
industry, as the country tries to balance the dangers of
offshore oil development with the benefits.

Brazil was criticized for the heavy-handed way regulators
and prosecutors came after Chevron for what the industry
regarded as a minor accident, with an estimated 3,700 bbl
of crude dumped into the Atlantic Ocean.

Huge oil reserves have been discovered off the country's
southeast coast, but development is likely to be costly and
complex, and the threat of such dramatic court action had
worried the industry.

The deal would settle two civil lawsuits seeking more than
$20 billion in damages, although a criminal case involving
Chevron, drilling rig operator Transocean and 17 executives
will continue, the prosecutor's office said.

The deal can be approved if environmental regulator Ibama
confirms that the oil spill did not cause any environmental damage, as Chevron has
claimed, a spokesman for the prosecutor's office said.

The field has been shuttered since March, when oil started
to seep a second time from cracks in the seabed. The cracks
were in a different area of the Frade field than the initial
November 2011 spill, when oil started to seep into the ocean
after a drilling accident.

Brazil's National Petroleum Agency, or ANP, cited Chevron
for 25 infractions related to the spill, with Chevron paying
the agency more than $17 million in fines. Transocean was
absolved of any wrongdoing by the ANP.

Dow Jones Newswires

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